Seyfarth Synopsis: The California Court of Appeal affirmed a denial of class certification on the ground that the plaintiff’s expert report failed to establish claims could be determined on common evidence. The ruling highlights that trial courts are permitted to weigh conflicting evidence related to whether common or individual issues predominate. While expert reports often inform merits questions relating to damages, when those reports are the main source of support for certification, they equally inform issues of liability.

Plaintiff, a former Oracle technical analyst, filed suit alleging that Oracle’s employment practices violated various state wage and hour laws and constituted unfair business practices. Plaintiff’s case, both in the trial and appellate courts, turned largely on the reliability of his expert’s report.

Plaintiff’s expert’s opinion was based on a comparison of Oracle’s (1) payroll records, (2) internal time records, and (3) time cards. In comparing those data sets, Plaintiff’s expert purported to find a discrepancy between the number of overtime hours technical analysts worked and the number of overtime hours for which Oracle had paid them. In addition, by reviewing the time cards, the expert purported to uncover that many analysts took shortened or late meal breaks, or missed them altogether. Plaintiff moved to certify a class relying on a handful of putative class member declarations, but, in large part, through reference to a concurrently-filed expert report, arguing that his claims were subject to common proof through the expert’s comparison and analysis of Oracle’s records.

Oracle opposed Plaintiff’s motion to certify, relying on its own expert’s report and 42 declarations, 22 of which were from putative class members. Oracle’s rebuttal expert identified significant flaws in the methodology and care used by the Plaintiff’s expert. Among other flaws, Plaintiff’s expert included on-call, non-worked, and sick time in his time card numbers, which created significant discrepancies between the purported time worked and the time paid. In addition, the Plaintiff’s expert misread Oracle’s spreadsheets and ignored a $21 million overtime payment that Oracle had made. Finally, the expert made a number of assumptions about the data he analyzed, but failed to disclose those assumptions in his report.

The Trial Court’s Denies Certification

In denying Plaintiff’s motion for certification, the Court concluded that Plaintiff’s expert report was unreliable based largely on the reasons set forth in Oracle’s opposition. Specifically, the court found that because Plaintiff relied on his expert’s report to establish that three of his claims could be determined by common proof, and because that report was unreliable, he could not establish commonality for those claims.

The Appellate Court Affirms The Denial of Certification

Plaintiff appealed the trial court ruling on two main grounds. He first argued that whether or not his expert’s calculations were accurate should not have been considered on his motion for certification. Accuracy of expert reports, he argued, is a merits question. Second, Plaintiff argued that the trial court improperly weighed the competing declarations submitted by the parties.

In evaluating the first question, the Court of Appeal noted that whether or not common issues predominate over individual ones is often closely tied to the ultimate merits of a claim. But the Court did not stop there. The Court rejected Plaintiff’s argument that Plaintiff’s expert’s opinion went only to the merits of alleged damaged in the case, holding that when a party’s expert report serves as its sole support for establishing that common questions predominate, the party has transformed that report into evidence of liability, not damages. As the Court explained:

Plaintiff’s only evidence that uncompensated overtime and missed, late, or short meal breaks could be established classwide with common proof was [his expert’s] declaration and his comparison of [two of Oracle’s] databases. The issue here is whether Plaintiff can establish that class members worked overtime for which they were not paid or had late, short, or missed meal breaks on a classwide basis, and this is a question of entitlement to damages, not damages themselves.

The Court also found it was within the lower court’s discretion to weigh competing declarations from the parties in order to determine whether the requirements for class certification were satisfied, and that doing so was not an improper evaluation of the merits.

Employers defending against class certification motions that rely on expert opinions to establish liability can, and should, offer contrary evidence, and make clear to the court that they are arguing certification and liability issues, not simply damages issues.